PERTH (miningweekly.com) – ASX-listed junior Red River Resources will need to invest A$17.7-million to restart production at its Thalanga zinc project, in Queensland.

A recently completed restart study at the mine estimated that the 650 000 t/y processing plant could deliver average production of 21 400 t/y of zinc, 3 600 t/y of copper, 5 000 t/y of lead, 2 000 oz/y of gold and 370 000 oz/y of silver-in-concentrate.

Based on a mining inventory of 1.7-million tonnes, grading 1.4% copper, 1.2% lead, 7.5% zinc, 0.5 g/t gold and 54 g/t silver, the Thalanga project was expected to have an initial mine life of more than five years and would generate a life-of-mine revenue of A$628-million, a net present value of A$84-million and an average free cash flow of A$25-million.

“We are exceptionally pleased with the outcomes of the study, which clearly demonstrates that the project will become an outstanding zinc and base metals mine,” said Red River MD Mel Palancian.

“In this macroeconomic environment, the low-risk, low-cost nature of the project is a significant competitive advantage for Red River.”

The project was acquired from Kagara in September 2014 and has been on care and maintenance since 2012.

Red River was planning to sequentially mine the West 45, Far West and Waterloo deposits, with production expected to start some six months after a final investment decision was made.

There was also substantial upside to the project, given the anticipated high-grade extensions to areas of known mineralisation at Far West and the fact that no material from the Orient or Liontown deposits was currently included in the restart study.

Based on the work carried out to date, Red River had determined an exploration target of between 500 000 t and 750 000 t, at between 10% and 15% zinc equivalent at Far West.

Red River said the company would now progress long-lead items, combined with project and corporate development activities with the aim of starting production at Thalanga in 2016.

Exploration work would also continue in parallel with a re-start of production.